The price of gold was pulled down by a much stronger U.S. dollar on Tuesday. Global investors are currently focusing on shifting their bets as the Fed is expected to lift interest rates sooner and signal three more this 2018.
U.S. gold futures fell as low as 0.2 percent to settle at $1,315.80 an ounce for its April delivery. Meanwhile, spot gold edged down more than 0.1 percent to finish at $1,315.86 an ounce. In relation to the yellow metal’s drop, the U.S. dollar index jumped by 0.1 percent at 89.883 against its major opposing currencies. The index rebounded on Tuesday as it was 0.5 percent lower on the previous day.
It is already given that a stronger dollar is not good with the yellow metal because it will make the non-yielding bullion too expensive for holders outside the United States. This will, therefore, weaken the global demand.
Outside the market, the Trump administration is highly forecasted yo unveil more than $60 billion in fresh tariffs on imports in China this coming Friday. According to two officials briefed on the issue, Trump is targeting telecommunications, technology, and intellectual property.
The biggest exchange-traded fund that is backed with gold SPDR Gold Trust said that its holding increased about 1.26 percent to 850.84 tons on the previous day, higher than Friday’s 840.22 tons. According to figures from IMF, Russia has also lifted their holding by 22.80 tons to 1,880.53 tons for the month of February.